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tv   Worldwide Exchange  CNBC  December 17, 2012 4:00am-6:00am EST

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hello. welcome to today's "worldwide exchange." i'm ross westgate. and i'm kelly evans. >> japan's prime minister wastes no time on calling on the bank of japan to recognize support after a land slide win returning
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the dlp to power. get a little, give a little, house speaker john boehner may be willing to raise taxes on the wealthy if president obama allows entitlement cuts in return. and corporate news weighs on sentiment across europe. kpn shares fall after dividend and greco stocks plunges as analysts cut their outlook for the uk power group. >> okay. welcome. it's the start of a brand new week here on "worldwide exchange." and don't adjust your set, kelly and i are together. >> for once, for a day. >> but make the most of it because it won't be lasting. >> if only there were a slo-mo.
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>> i'm going to enjoy as much as i can of today. >> and likewise. and then we're going to have to get all of our u.s. voouers to find cnbc world because they could get three hours of you, carol and carolin for the rest of the week. >> whatever they can do. record it and fast forward to the good bits. >> yeah. >> it will be 2:00, 3:00 in the morning or whatever. on today's show, plenty to come on. >> yes. the south american union faces ejection from the imf for allegedly cooking its books about the innation rate. we'll head out to europe where the swiss banking giants could be facing $1.6 billion over libor rate rigging allegations. >> and we'll be on the floor in beijing where china's leaders just wrapped up a major conference.
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and japan's prime minister election is calling on the bank of japan to heed the call of the masses. abe is beating the heat on the boj just one day after his party's huge win and two days after the bank's next rate setting meeting. kaori enjoji has the latest for us. how much of a game changer is all this? >> this is a serious game changer. it's a comeback for the dlp and shinzo abe. he has made it clear that the economy and economic recovery is going to be one of the pillars and hallmarks of his second time in office and he's wasting no time in piling on pressure on to the bank of japan who holds, of course, their two-day policy board meeting later on this week. here is what he had to say. >> i have constantly stressed
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our desire to present a policy accord in raising the inflation target to 2%. i do think it is unusual for monetary policies to come to the forefront during elections, but we have been able to gain much support for this. i hope the bank of japan will take this result intoious consideration. shinzo abe has led the party to what's called a super majority. effectively, more than two-thirds of the 480 seat house that were up for grabs over the weekend. they've garnered those ballots. as a result, they can override any decision in the chamber of parliament. technically, this political inertia has claimed so many victims in terms of prime ministers in recent years, it has been removed. however, most political watchers i speak to say it would be foolish of the prime minister and the party to try to do too much too soon because already the politicians are looking ahead to the next election, which is going to be happening next summer. in about six months' time.
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solo there is a lot on the agenda, for example, territorial disputes, a huge deficit, as well, most political analysts say it would be wise for the team abe camp to focus on economic recovery. but as far as this damaging territorial sfut is concerned, here is what mr. abe had to say. >> the island res part of japan's territory. it is backed by international law. there is no room for negotiation on this issue. >> a lot has been made ahead of this result about mr. abe's hawkish stance. and there was some notice the last time he was prime minister his first foreign trip was to beijing to try and mend fences. but this afternoon, he said that will not be the case and instead, his first foreign trip will be to the united states possibly at the end of january or early february to try and mend this u.s.-japan security alliance which forms the
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framework, in his words, to the relationship with china. so those are some of the initial remarks coming from shinzo abe. his new government will be in place by december 25th. what are you hearing from voters, as well? some of the things going around the market today is this verdict is not so much -- what's the sense, is it excitement about this new party and what they might accomplish or is it frankly just frustration? how much of a mandate will this new coalition have? >> i would highlight the voter turnout rate. it was below 60%. this is a record low in the post war period. although this was a general election and first national ballot since the march disaster, only about half of the population decided to vote. you can interpret that in many
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ways. interpret it as so many parties coming, new parties being born right before the election, there were 12 parties to choose from. it was a hastily called election and 40% of the population even before this vote was saying they were undecided. and it's possible to interpret those who were undecided decided to skip the election altogether. so i think the numbers are pretty much -- you know, the people who decided to vote voted in favor of the ldp. that is absolutely undeniable. but you have to also remember the voter turnout was exceptionally low even though there are many critical issues facing japan at this moment. >> thank you so much. let's get more from brad williams, visiting assistant professor at the university of hong kong and nafumi yamamoto. if we could first, masafumi, go straight to the reaction we're seeing, does that suggest it's
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the super majority in parliament that was a surprise here? >> by the potential, the aggressive monetary and fiscal policy and it realized and it seems that the market has other priced fully about the such super majority of the ldp and interreaction was forward to show that and got the value he wanted. so i think we also think that the administration, aggressive policy and higher inflation for expectations will weaken the yen dramatically. >> and just how dramatically? there has been some suggestion we could see a disjointed move into triple digits next year. how likely is that, in your view? >> triple digits? i think it's unlikely, but
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still, think the dollar/yen has been falling down because of the weak u.s. economy and weak treasury yields. however, i think this year the function has been changing and it seems that the market is more sensitive to the japanese buffers. for example, the risk monetary policy which is not necessarily reflected in the japanese rates or the u.s.-japan interest rates. going forward, i think the japanese policy initiative will push down the yen farther. and we expect the yen to rise to 86 in three months and eventually into 90, about 90 in one year time. >> brad, that yen weakness is, because as we heard there, is because of the aggressive bank of japan's monetary policy. now, the question is whether abe -- and he had this strong majority n lower house, whether he will use that to vote down overall the upper house if they
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want to change the mandates or anything else for the bank of japan. is he going to do that or not? >> i think abe needs to be very careful. the election was more an attempt to punish the dpj rather than a ringing endorsement of the ldp. abe is not particularly popular and i think he's aware of this. i think initially he would be very careful in trying to do this. >> so what will -- are you saying expectations, he will lean on the bank of japan early are wrong? >> possibly, yes. >> why wouldn't he act? would he wait until we have upper house elections in the summer? >> well, i think, yeah, turn house elections in the upcoming summer are going to be very important.
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stimulating the economy is something he will do to help him enact controversial security policy changes. >> having been at the boj yours, would you agree what you're hearing there from brad? >> i think yes, politically, they worked be careful how they form the majority, the upper house, as well. in order to get the majority and the upper house election in the coming summer, they should show some success in terms of market policy or the fiscal policy. the first thing i think they should spawn separate budgets and this will give the way for the more popularity. and they don't necessarily need
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to use the majority. rather, i think they -- especially about the recognized policy. there is a kind of agreement among the political parties. so in order to use that carefully about the strength at the lower house, then i think they could -- as it leads to the strength of the upper house election, as well. >> yeah, brad, all this focus is on monetary policy. i mentioned here we get a supplementary budget. what can they do fiscally? we've had a lot of concrete generating programs over the last decade and a half. we don't need to be slightly more out of the box thinking. >> you're right. there has been a lot of spending in the past on wasteful public works projects. i don't think public works projects per se are such a bad
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thing, but the money needs to be channeled into projects that are going to benefit these communities. and hopefully kick start the economy rather than local contractors and the ldp's traditional supporters. >> and we'll leave it there. brad williams from the visiting professor at the university of hong kong and mr. yashi yamomoto. nice speaking with you, gentlemen. just over an hour into the trade dag here, you can see advancers being outpaced by decliners. we've been up for four weeks in a row for european equities, the ftse and the dax. the ftse up around 7 points last week. today it's down about .3%. the xetra dax, trading up nearly 29% for the year. it was up 1% last week, 2.5% on
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the month. the ibex is down slightly and the ftse mib, fairly flat at the moment. we keep our eyes, of course, with what's going on with fiscal cliff discussions in the united states. reminding you of some of the individual stocks, hms, up 2% on better than expected same-store sales. kpn has its target cut, the stock down 17.3. and aggreko, down 16%, as well, warning on its outlook for next year because of reduced military revenues and uncertainty about japanese contracts. that's the stock news. let's show you where we stand with treasuries. friday, we had a high yielded month. 1.7964. below that e at the moment. ten-year spanish yields, 5.4.
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we might hear from aaron monti as to whether he intends to run as a candidate, although he's going to step aside as sort of the incumbent prime minister. ten-year spanish yields, slightly allow at 1.372%. we go to 84.48, the lowest against the dollar since april 20111. euro/dollar, 1.3159. kind of where we were at new york levels. that's where we stand right now in this european session. let's recap the trading week so far in asia. deidre has more for us in singapore. dei. >> ross, you were just talking about the yen. let me start there. it did hit a 20-month low against the u.s. dollar. that helped out u.s. equities. they hit an 8 1/2 month high
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after shinzo abe won the election. japanese equities, they moved inversely. the korean won is strengthening against the yen and this is putting it head to head with some of the japanese carmakers. it's causing concern about the korean carmakers because their vehicle res now becoming more expensive. so we did see some weakness there. moving on the tote greater chinese markets, the shanghai comp continued to gain. it has been on quite the rally throughout december rising about 9%. keep in mind, though, that this is a government orchestrated rally. we saw that huge surge on friday, more than 4%. it continued today gaining more than .5% and it has cut down the losses that mainland equities have seen this year. however, i wouldn't hold my breath. we have seen this many times in the past. and it has not losted. meanwhile, we did have the hang se
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seng, though, the shanghai comp failed to lift this index up, down about .4%. in this market, we had chinese sportsmaker li ning in focus. this is the chinese version of nike of adidas. it warned it would take a hit in 2012. the asx the 200 was easing from a fiscal high. finishing at 4,573. the sensex in india saved off about .4%. we have an interest rate decision from the reserve bank of india tomorrow. abdomen lists are expecting that they will hold, though some believe that it may cut the cash rate. all in all, ross, a subdued day out in asia, but a few outperformers in japan and perhaps more surprisingly shanghai. back to you. >> an eight-month high for the
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nikkei there. cnbc is taking a closer look at how the new war ondy flagz is playing out in tokyo. head over to our website, krn.ckrn for more information there. if dwrur wondering what is in store for 2013, contributors and analysts are delivering their boldest calls for the trading year ahead. if you're looking for more clues on the european outlook for next year, david jones will be here to take a look in his very own crystal ball coming up in just a few moments.
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shares of the world's biggest cementmaker dipped to restructure its european operations. they could put charges of over 500 million francs. carolin has more out for us out of europe. >> hey, ross. let's take a look at the market reaction. initially, the reaction on the markets is quite subdued. now accelerating its declines, off by 7.1%, the second worst decliner on the market. let's come back to holcim.
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it is responding to the sluggish construction environment in europe and that is why it's restructuring its european operations. it is taking a $440 charge on write-offs for property plan and equipment. on top of that, it sees an additional 1100 million swiss francs in costs for the fourth quarter. so the overall hit to the fourth quarter will be 500 million swiss francs. it does say that the rebound will save around $120 million swiss francs annually. but overall, analysts are surprised about the size of the additional write-offs that will be booked in the fourth quarter. but holcim is trying to reassure investors this morning, saying there is still potential for a dividend payout for 2012 but that decision will be taken at the end of february 2013. also, it is flagging some management changes on the european leader but at this
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point, it was quite mum about the details of that. overall, holcim down by about 9 the%. italian center right leaders have stepped up the pressure on mario monti to run for a second term. the freedom rights party said monti should believe in the rights of moderates in order to prevent the center left from taking power next year the polls show 44% of the run would be positive compared to 50% who thought it would be a bad thing. now, the 76-year-old berlusconi has announced an engagement to his 27-year-old girlfriend live on italian television. the billionaire revealed that he
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finally felt, quote, less lonely thanks to his relationship. it will be mr. berlusconi's third marriage provided he can reach divorce arrangements from his current wife. now as investors prepared to head home for the long christmas holiday, we're taking a look at what is in store. a slow grind to recession, that man is david evans, chief financial economist at jeffries. thanks for joining us. when do we come out of recession in europe? >> the uk at the moment is showing clear signs of recovery. i think if we can through the first quarter of nkts year, it all will be recovering. i don't care expect this to be a real turn until the second half. as we go into the second half of next year, it will become clearer. even the eurozone is recovering. within that, you'll have very much the laggards. france won't do particularly well, but germany and italy
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maybe next year have a potential surprise on the upside. >> how much of a surprise? >> it will not be a fast recovery. the ecb will be forced to do more, but they'll be drald dragged into it. so things will have to get worse before they act. so i don't really think -- >> what more actions? they have a t program waiting to go. what more actions are you talking about? >> the key policy rate for the ecb is likely indeed in the first quarter. they can take dpopt deposit rate negative. by the middle of next year, they'll be doing outright qe. i've been talking about this for ages. they haven't done it so maybe they won't do it. but i'm assuming that the outlook for inflation for the eurozone is -- >> how are they going to get
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around -- look, i know the bundes bank has a fear of hyper inflation. i just don't -- are they going to get around all the -- because even if they do it on the inflation mandate, are they going to get around the objections about outright money printing? germans would see it as that. >> they would see it as outright money printing. we have done qe. it's not an issue on the legality of it as long as you justify it in the inflation mandate at the zero policy bound. but the question is, you know, how low is inflation in the eurozone going to go? you have core inflation in the eurozone below 1.5%. if you strip away indirect taxes, that's adding about 60 basis points in inflation rates. i think wage inflation is very low. inflation will be trending towards 1%. at that point, they have to do something more.
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>> at that point, the dax keeps going up. >> that's interesting. you're seeing the response in germany which is the one strong area if that across the eurozone. it's funny, to the extent that germany weakens, it makes it easier for the ecb to act. but the more they hang in there, while it might be good for the eurozone in terms of growth, it might complicate the policy response. >> absolutely right. if germany was in deep recession right now, that will force their hand. but at the end of the day, the housing market has recovery, you know, you can build a convincing case that germany at some point will see reasonably strong growth. but i think the markets look forward. i think if we get a recovery occurring in the eurozone, nkts look forward to 2014 and beyond. >> spain? >> for sure. >> when? >> probably in the second quarter. >> that's an interesting idea,
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all at once. david owens from jeffries, thank you so much for stopping by. straight ahead, economic policies for next year and what is in store for markets if it mean slower, short-term growth? can i help you? i heard you guys can ship ground for less than the ups store. that's right. i've learned the only way to get a holiday deal is to camp out. you know we've been open all night. is this a trick to get my spot? [ male announcer ] break from the holiday stress. save on ground at fedex of.
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shinzo abe wastes no time on calling on the bank of japan to ease interest rates. get a little, give a little. reports say john boehner may be willing to raise the tax rates on the rich if president obama raises the cuts. and corporate news weighs on sentiment in europe. kpn shares fall as the dutch telecom group scraps the divide dividend. okay. we're into new trading week here. the xetra dax and the french market up around 1% last week. the ftse just up around 9 points. we're up more than a third, the
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xetra dax is up near five-year highs. up marginally under 2%. >> called for this morning at the open, up 30 points and now down about .1%. >> 157% for the month. >> catching its breath, that rally is. let's take a quick look at what's happening in the bond space this morning. you can see the red across the board. we're seeing spain move up to yields at 5.24%. italy is coming in. again, we'll keep an eye for my comments from mario monti throughout the day. >> the market is focused on the yen. it's been weaker across the board today. the yen has been down for the lowest in a year against the greenback. we hit 84.48. it's pulled back from that. sterling/dollar is steady at 1.6185. plenty of focus on the dollar
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and continuing ongoing fiscal cliff discussions. meanwhile, in china, leaders there have wrapped up their weekend of economic plan, a list of must-dos next year. also across expectations of any big stimulus, much like the $600,000 boost that we got in 2009. eunice is with us once again from beijing. hi, eunice. sum it up for us. >> well, i would say that we saw a lot of bright moves, a lot of brush strokes, but nothing in terms of specifics. for the most part, the policymakers were saying all the right things. they were saying they hope to see more economic reforms, that they hope to see more in terms of a shift in terms of, you know, moving the economy away from state investment, from exports and moving it towards stimulating domestic demand.
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however, in terms of specifics, we are really lacking. there were no timetables, no concrete measures to get us to where we would want to see china's economy. because of that, there's a bit of a fizzle from all of the weekend's discussions. however, what people were talking about also was that the highlights for the weekend discussions were that they -- the senior officials were saying that they recognize that some of the issues that the -- and the challenges of the economy. they said that for the most part they were concerned about some of the uncertainty. also they were concerned about the internal risks as well as the overpass issues that the country is facing. the other thing that was interesting in terms of the highlight was there was an emphasis on urbanization, which is a very important project for the incoming prime minister. another highlight was the emphasis on the need for a social safety net in order to try to make people feel a little
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safer so they could spend their money. >> yeah. and look, this idea of rebounding from growth, how much slower growth do you think is politically acceptable in the long-term to achieve a longer term aid? >> one of the things that analyst res watching for was to see whether or not we were going to have any concrete targets. and right now, a lot of analysts think that the government would be comfortable with something in the range of 7% to 8%, so like 7.5% or so for the next coming years. and that is seen as something that's acceptable in terms of slower growth. you have to think about the chinese economy has been coming off of double digit numbers. so..5% still fast growth for a lot of other economies, but here in china, that's seen as a bit of a slowdown in terms of the economy and something that's somewhat sustainable for the economy going forward without
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get intoog too much of a difficult situation for the chinese in terms of either social unrest or slower growth. >> all right. eunice, good stuff. we'll catch you later. let's get more on this. joining us is the chief economist at diawa capital markets. thanks for joining us. at what sort of pace do you think this leadership might be able to implement their reforms, their switch to domestic demand? will they go at the same pace as the previous administration? >> i would say the pace would be faster. i would say most people are surprised by how fast the new leaders actually took actions. you know, mr. shi and the shenzhen a few weeks ago and he made et very clear that he's going to take the path since
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1978. so basically, the new leader is ready for reforms, for changing the growth pattern for china's economy. so i think it's going to be very fast. but on the other hand, the new leaders mentioned about the challenges, the difficulties of these reforms. i think everybody understands what it means. so i think the launch of these reforms, off this economic growth model will be prequick. but in terms of the completion, i think it's going to be quite prolonged, i think. >> yeah. and how much difficulty are they going to have as they change policy dealing with the local vested interests? >> i will say they really need some kind of wisdom in terms of design the reforms. one thing i'm very sure about is i think in china, in bay jipg,
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there is a strong consensus that china needs reforms. everybody agrees on that. the only issue, when the reform has been implemented, some of the vested interest groups will be actually affected. i think it's really depend on how the reform is going to be designed. i think in the conference over the weekend, you know, the new leaders talk about some kind of -- you know, like pop design, probably, in other words, overarched design for the whole reforms. you know, it's going to be -- has to be cognitive. it has to give up something. and i think there's consensus among different groups. it's different. i think everybody knows this, but i think it's still very hopeful. >> so what is going to happen to china's demand for resource, for basic resources? i'm wondering how this, you know, impacts commodities space.
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>> i will say that demand is very strong. even think about a 7% growth or 8% growth, you know, concerning, you know, china -- the size of the chinese economy already, the second largest economy in the world. 7.8% growth. it's going to create a lot of incrementant demand on the commodities space. if this kind of growth continues for another five to ten years, it's going to double that demand. think about that. i will say after this cyclical weakness in the -- in 2011, we are going to see pick up in china's demand. in 2013 especially around the summertime, i think by second quarter of next year, we can see china gdp growth going into something around 9% year on year. i think we are looking at a lot of demand on commodities side. >> that's extraordinary because
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at the same time the pboc official or someone affiliated with the central bank seemed to suggest today that china was cutting its m-2 target in terms of growth. this is being taken@as another sign of a willingness to allow for kind of a slowing in the macro environment. so in light of these comments, even, you see a return to 9% growth next year? >> 9% is a year on year growth for the second quarter, only for one quarter. i think for the whole year, the number will be something around 8%. but for the second quarter, probably for the third quarter, as well, it's mainly because of the low effect, because of restocking, because of the impact of the stimulus introducing summer of this year. i think summer of 2013 will be very strong, only for one or two quarters. >> thank you so much. if you have any comments you want to respond to so far that
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you've heard on the program this morning, you know how. >> it has to go left to right. >> i know. it's like looking from a mirror trying to read from it. in any case, let's turn our attention to the banking sector. >> santander, which owns 90% of banesto, says it will analyze a full takeover of its subsidiary. they have a board meeting to discuss the move. >> we are getting. >> details. reuters reporting that santander says the share amount will amount to 0.663 santander shares for each banesto share. >> we're starting to get pieces of that through. ubs is also in focus. regulators are set to issue heavy fines this week. reuters suggest that authorities in america, britain and possibly japan will fine the swiss bank
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in excess of $1 billion for its part in the fixing of the rate. carolin rejoins us with more on this story. >> hey there, ross. if you believe press reports from swiss daily over the weekend, that fine could be much more than just $1 billion. it was suggested it could be $1.5 billion swiss francs or $1.6 billion. that would be a massive fine if that's confirmed and it would be much, much higher than what analysts had anticipated. three times the amount that barclay's paid over the summer and remember that ubs cooperated quite closely with authorities over the last two years and received conditional immunity from some of the regulators. that's why analysts believed that the fine would be considerably lower than that which barclay's paid. it does suggest that ubs may be the worst offender. as pat of the deal, according to a couple of press reports, ross,
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this is quite interesting. it says that ubs will even admit to criminal wrongdoing in its japanese arm admitting that some 36 traders manipulated yen/libor between 2005 and 2010. and by bringing criminal charges against ubs subsidiary, regulators are clearly showing the gravity of the situation but at the same time, they don't risk bringing down the bank altogether, but there is a chance that ubs could be losing its banking license in japan. so we're expecting the announcement to be made tomorrow, possibly. back over to you. >> all right. carolin, thanks for that. just to recap that santander news. >> we're getting word that they have approved the deal to take over the remaining portion of banesto. shares will be set at 0.663 santander share for each banesto share. banesto has frozen trading and we'll keep an eye out for its
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resumpti resumption. and ubs could be paying around $250 million pounds for the scandal. rbs is declining to comment on the report. you look at the fines that ubs, rbs, everybody else is going through. it's not costing any of them their management, is it? i'm just rethinking back to barclay's. >> right. right. >> barclay's were the first to go and say there's an issue, fess up, management gets cleaned up. everybody else coming later, same scale. >> so true. although everybody else has been restructuring significant shake-ups. >> i'm just saying, what a mistake for barclay's tactically to try and get ahead of it, right? >> yeah. >> if they had just sat back and said we'll wait -- >> they did get leanance when it came to the fine. >> yeah, but it cost the management. >> well, maybe that is wa -- >> management tactic point of view, clearly got it wrong,
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right? if they had just sat back with everybody else, they would have been the same fines. politics, right? >> absolutely. ubs has launched a setback against banking regulations. the fts clearinghouse will make the report of a global liquidity requirements. lenders will have to come up with asset toes comply. u.s. banks have raised their holdings of such liquid assets to $700 billion. that's about half of a shortfall claimed in 2010. islamists have claimed victory in egypt after a set of reforms were approved. the opposition is alleging fraud saying they will await the results of next week's vote. ayman has the latest from cairo. >> millions of egyptian voters turned up on saturday to cast their ballots on a historic referendum on the country's
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constitution. local media was saying based on exit polling, that the constitution was passed by 57% in favor, 43% opposed the constitution. now, over the past several weeks, the country has been polarized over the debate whether or not to actually approve this new constitution that crickets say curbs individual freedom and more importantly paves the way for islamic sharia law to take over the state. supporters of the constitution say this is the only way to get the country's transition back on track and to get democratic institutions up and running. for their part, though, egyptian civil size and human rights organizations criticized first round of voting. the voting that took place on saturday only happened in 10 out of the 27 provinces and only half of egyptians eligible to vote participated in the first round. that is because the second round of voting is scheduled to take place next saturday, december 22nd. as we were saying, human rights
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organizations criticized the first round of voting. they say it was marched with all types of violations, serious violations that threatened the integrity of that first round of voting. and more importantly, they are calling on egyptian authorities to annul the results of the first round and to hold both rounds of the constitutional vote on a single day under very strict supervisions. among the examples that they cited of violations included voter intimidation, certain voting groups including christians were not allowed to go into the polling stations, there was a lax amount of supervision around many of the polling stations and more importantly, they say they were all types of campaign violations close to those polling stations as voters made their way into the polling station. that number close to 6,000 in the first 10 -- where the referendum was being held. despite that, though, egyptian government officials hailed the first round of voting as a success and more importantly,
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they say they are going to continue with next week's vote to determine whether or not this country approves the constitution as it stands right now. one that has, as we mentioned, divided the country between largely islamist supporters of president morsi and the constitution and the opponents to the president that is made up mostly of liberal, secular and moderate forces. back to you. >> thanks very much for that. we want to circle back now to one of our top stories today. the japanese election with the ldp's shinzo abe slated to become the new prime minister, markets are expecting the boj to come under pressure to loosen policy. >> beating deflation is a top priority of the new ldp-led government. after it is inaugurated on december 26th, the abe administration is poised to act quickly to boost public works spending and press for bold
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monetary easing. with the ldp, there are growing calls for the 2012 budget to $120 billion to fill the economy's supply/demand gap. the ldp and its coalition partner are like to go ahead with increasing government bond issuances to help finance the package. already, abe is trying to tighten the screws on the central bank. he has pressed for a policy accord with the bj to set a 2% inflation target. to back up this strategy, abe has decided to take the professor emeritus of economics at yale university as special adviser to the cabinet. hamada is a supporter of easing monetary policy and critical of the policies of the boj. back to you, kelly. >> thanks for that. we want to take a quick look at what's on the agenda for asia tomorrow. meanwhile, australia's central bank will release minutes of its previous meeting. and on politics, the chinese delegation led by wang qishan
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will arrive in washington. still to congress on the show, russia has joined the wto. it did it just four months ago, but complaints with its lack of compliance with the laws are already stacking up. we'll get a view when we come back.
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wto regulations are valid according to a top trade lawyer. karen spoke to an expert and asked why the u.s. invariably features as the main protagonist. >> i think there's a number of factors going on here. first of all, i think it's absolutely normal for the united states to be the most tiff wto dispute settlement participate. if you look at the figures, i think they have been the most active every single year since the wto was founded. it's a natural by-product of the huge size of the u.s. economy. they're the most active trading nation so they're going to trigger the most disputes. they sue the most and they are sued the most. that's absolutely normal. i think presidential politics played into this, as well.
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as you saw in the last stages of the campaign, both candidates, including president obama wanted to look tough on trade issues and filed a number of cases against china. so that's another factor. and also just a slight uptick in the state of the world economy has meant that there is more at stake. there's more on the table and that in itself has generated trade friction and has generated new trade disputes. >> let's linger a little bit on the sino/trade relations. do you see any change in they relationes and how these two countries deal with each other after the lip change? and both countries, even though obama was re-elected, but specifically the leadership china china? >> i think that the u.s.-china trading relationship is now so huge, so important, it's grown beyond any particular leadership question. it is a very large trading relationship. a trading relationship that is that huge is bound to generate
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trade friction. in fact, if you look ten, 20 years ago, people talked about north/south trade. people don't really talk about north/south trade any more because north/south trade is dominated by u.s./china trade. i think that's only going to increase. i think that as this trading relationship expands, it's natural that it's going to generate trade frictions on the margins and so we'll likely see more disputes in the future. >> let's talk about russia. a couple of days ago, a number of countries have voiced their concerns about the delays in compliance to wto rules. are you concerned? >> i think it's valid to be concerned about whether russia is going to comply fully and when. in fact, its membership is -- the russians have been in the wto since august 22nd of this year. so it's a very fresh membership. and if you speak to a lot of companies that are active in russia, there is a certain nervousness about whether russia
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will comply fully. but it's not really a question of will they comply, yes or no? there's really thousands of things that the russians need to do to comply. just like there's thousands of things that the u.s. or the chinese or the eu have to do to comply. and we now have this mechanism whereby everybody in the wto will now be looking over russia's shoulder for each of those thousands of decisions to see whether they're sticking to the deal that took 14 years to negotiate. and within the wto, there have been a number of countries that have expressed concern about russia's record so far. it's early days yet, but i think that russia should expect to be under real scrutiny now moving forward. now over to drama in france. french actor gerard depardu says he'll give up his passport after
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his move for a passport is, quote, shabby. he says, i'm sending you back my passport and social security which i have never used. and given that he's worth over $100 million euros, i think that would be expected or hoped, at least. >> mind you, you know, they're going to lose a lot of v.a.t. sales. he paid a lot of taxes. >> i suppose if he's living in the belgium border town, he can come back and forth a bit. >> i'm just saying he's paid a lot in consumption. >> there is an argument that there should be a consumgdz tax as opposed to anything else. e-mail us, still to on come, we'll head back out to tokyo for more
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reaction on the japanese elections. can i help you? i heard you guys can ship ground for less than the ups store. that's right. i've learned the only way to get a holiday deal is to camp out. you know we've been open all night. is this a trick to get my spot? [ male announcer ] break from the holiday stress. save on grou at fedex office.
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welcome to "worldwide exchange." i'm kelly evans. and i'm ross westgate. >> give a little, get a little. house speaker john boehner may be willing to raise taxes on the
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wealthy if president obama issues entitlements in return. china's new leadership calls for an economy driven less by exports and more by domestic demand, even if it means slower growth in the short-term. >> announcer: you're watching "worldwide exchange," bringing us business news from around the globe. let's take a quick look at futures now. they are pointed higher generally speaking. the dow looking to add about 30 points to the open. the nasdaq struggling to get into the green. nasdaq has been weighed by apple underperformance that we've seen since those shares peaked earlier this year. the s&p 500 is trying to add a couple of points this morning. 1410 is the level there. futures have been under pressure as we've seen the european trading session turn from a rally premarket to a generally lackluster trading across the
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board. the ftse cnbc global 300 is down about on 0.6%. you can see the give back we've been seeing across the session especially in the last couple of minutes. the bourses are in the red. ftse shedding about .5%. the xetra dax down 0.2%. the cac 40 down 0.6% this morning. and the ibex 35 is down about 0.2%. a lot of individual names driving the market weakness. holcim, the cementmaker i mentioned. there aren't a lot of reasons to rally. >> xetra dax up near 29-year highs. it is extraordinary. you have to put that in some kind of context. let's show you where we stand with bond markets. ten-year bund yields, 1.37%. spain, 5.42%. nowhere near asking for assistance as we head into the new years. slightly lower today on italian bonds. just below 5%.
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ten-year u.s., 1.7196%. on the currency markets, plenty of focus today on the yen. post shinzo abe getting very strong results in the parliamentary election. so they dominate the lower house. they've made calls for the bank of japan to step up its easing. dollar/yen, we did get down to 84.48. that's the weakest we've seen the yen against the dollar for a year and a half. not far away from where we were in the close in new york. sterling is firmer against the greenback, as well. dollar up against the yen. yen down against everything. other currencies steady against the dollar. so that is where we stand right now. in europe, let's recap the asian trading day. deidre has more for us from singapore. >> weaker yen helped out japanese equities. the nikkei 225 closing at a
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fresh a-month high. this is after shinzo abe's land slide victory. some analysts now saying that the nikkei 225 is further in overbought territory. keep in mind that this index has risen about 10%, nearly 10% over the last month. so has seen a very good rally to end the year. it is now outperforming u.s. and european equity markets, as well. however, a different story for south korean stocks. now while the japanese yen is weakening against the u.s. dollar, the korean won is strengthening against the japanese yen. this is basically causing concerns for exporters, such as the main automakers in korea. they lost the likes of kia and hyundai were big losers today in south korea, pulling the kospi down about .6%. moving over to the greater chinese markets, we have the shanghai comp continuing. a stellar rally that we have seen over the last month or so. for the month of december, this index is up about 9% coming from
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very low levels. it was one of the worst performing indexes of the year. now it is under water by i believe about 1.5% or about 2% for the year. this is a huge change from where it was at just a month ago. this is, of course, keep in mind, a very much government orchestrated trally. the government has said that it's going to step in and support the market. there has been talks of lots of reforms to get funds into the market both domestic and foreign. but whether it will last, i'm not so sure. we have seen this in the past, over the past few years, big rallies by the shanghai comp to give it up in not a lot of time. the hang seng went the other way, down 0.4%. it did keep these markets a little bit muted today. so we were down about .4%. now, one of the major stocks that moved on this market was li ning, the chinese version of nike or adidas. the company coming out and saying it was going to book a substantial 2012 loss for the
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year. that dragged down the greater markets. keep in mind that the hang seng has been on a roll this year, up about more than 22% year-to-date. the s&p asx 200 giving back a little bit of gains. it is coming off a 17-month high. losing about 10%. resources did provide some support. the sensex in india, some weakness. it has come off the day's lows. keep in mind we have a decision from the reserve bank of australia, from the reserve bank of india, i'm sorry, largely expected to keep rates on hold. back to you guys. >> thanks for that. now, japan's elections shinzo abe calling on the bank of japan to ease monetary policy. putting the heat on the bank of japan just one day after its party's win and two days before the bank's rate setting meeting. >> kaori enjoji files this
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report from tokyo. >> this is a serious game changer. it's a major comeback for the party and a comeback from shinzo abe who gets a rare second chance to be prime minister of this country. he has made et clear that the economy and economic recovery is going to be one of the pillars and hallmarks of his second time in office and he's wasting no time in piling on pressure on to the bank of japan who holds, of course, their two-day policy board meeting later on this week. here is what he had to say. >> translator: i have constantly stressed our desire to create a policy accord with the bank of japan in raising the inflation target to 2%. i do think it is unusual for monetary policies to come to the forefront during elections, but we have been able to gain much support for this. i hope the bank of japan will take this result into serious consideration. >> shinzo abe had led the party to what's called a super majority. effectively, more than two-thirds of the 480-seat house that was up for grabs over the
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weekend. they've garperred those ballots and as a result, technically, they can override any decision in the other chamber of parliament. so technically, as this political gridlock, the political inertia has claimed so many victims in terms of prime ministers in recent years, it has been removed. however, most political watchers i speak to say it would be followish of the prime minister and the party to try to do too much too soon. already, the politicians are looking ahead to the next election, which is going to be happening next summer. in about six months' time. although there's a lot of agenda, even without the economic recovery, for example, territorial disputes, a huge deficit, as well, most political analysts say it would be wise for the team abe camp to focus on economic recovery. but as far as this damaging territorial dispute is concerned, here is what mr. abe had to say. >> translator: the senkaku islands are part of japan's
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territory. it is backed by international law. there is no room for negotiation on this issue. >> a lot has been made ahead of this result about mr. abe's hawkish stance. and there was some notice the last time he was prime minister, his first foreign trip was to beijing to try and mend fences. but this afternoon, he has said that will not be the case and, instead, his first foreign trip will be to the united states, possibly at the end of january or early february to try and mend this u.s.-japan security alliance, which forms the framework, in his words, to the relationship with china. so those are some of the initial remarks coming from shinzo abe. his new government will be in place by december 26th. >> great stuff there from kaori enjoji following the elections for us this weekend in tokyo. now we can take a will at the market response. we also want to bring you these comments. moody's is saying japanese
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fiscal policy expansion could help in the short-term, but reiterates that will leave the government are higher debt, which it certainly will do. whether that's relevant or not is a great question for jeffrey kendrick from now murrah. welcome. >> thank you. >> so about .6%, that was the move the last time i checked on the dollar/yen today. why wasn't this fully priced in inspect is it because there's a super majority in parliament and what are the real implications? >> the super majority was a marginal surprise. that's how we saw dollar/yen gap on the open. interestingly, it was very much largely priced from the options market that was thinking about roughly a 1% move in terms of break evens from friday to monday trading. we almost hit that perfectly overnight. just now, we know that clearly we got mostly the outcome that we expected. the super majority being new. but in terms of new news, on the bank of japan, we may have to wait some time.
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obviously, shirakawa doesn't roll off until the first week of april. we'll probably get a lot more as the gap is sworn in later this month. but on that boj issue specifically, it could still be some time. >> and i just wonder how much might potentially change here. we're seeing a lot of rhetoric. it was used during the campaign. clearly helped this coalition government come to failure. if you look at the minority party here, they're ohm calling, here, for an inflation target of is % to 2%. you're not necessarily seeing the kinds of things that would suggest some massive sudden break from previous policy. >> the interesting part part about the 1% or 2% inflation target as mentioned by abe just now and in the previous slide that you just had is that in japan, 2% would be massive inflation. even in the '80s when the japanese economy was booming, we averaged under 1% through that decade. >> oh, is that so? that's interesting. >> so it's extremely difficult
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too chief that. if anything, markets are saying, yes, go for that 2%, but is that achievable? >> i suppose old fashioned money printing. >> the helicopter. >> yeah. >> that's what bernanke said about japan, wa, ten years ago. >> jed of just buying government assets. with the bank of japan meeting this week, look, we already priced in that they were going to up their purchases a little bit, anyway. will there be anything they do slightly more? will people read something into that? >> it's likely to be a 5 to 10 trillion package this week. the real question going forward is whether or not they'll increase the pace of buying. mostly when we see these 10 trillion packages from the bank of japan, they're pushing it out through the end of 2013 or 2014 now. they'll increase the pace of buying or they'll need to increase the component. so that's the two structural changes. >> ordinary, isn't it? we're talking about the bank of japan buying nikkei futures.
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>> just to go back to the yen here, earlier guessed that he saw maybe a 9 the 0 target within the next 12 months. what's your own view? >> i think 90 is too aggressive. i know in previous cycles when you've had dollar/yen base, you've had big jumps. and then we think about fiscal cliffs in the short-term. assuming we get through fiscal cliff, you can easily imagine u.s. ten-years going up to perhaps 2% which will help the dollar/yen to the top side. but we're not talking about the fed clearly within this time wore rideson of one, two or three-years hiking range. so that u.s.-yield story can help. for us, it's more of a helper than a big driver. >> and it's the u.s. side that has to change more now to japan. >> exactly. we're going 8, so close to 90 next year, but those aggressive forecasts are slightly too strong. >> okay on. we'll leave it there. geoff kendrick, thank you so much. how speaker john boehner may be willing to give some ground in the u.s. fiscal cliff talks.
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he's floated raising tax cuts on americans making more than $1 million a year. house republicans have largely opposed higher taxes on the wealthy. in return, though, boehner reportedly wants to president to agree to major entitlement cuts, including raising the eligibility age for medicare and changing how social security benefits are calculated. a spokesman says a budget deal still remains far off and the white house has reportedly not accepted the offer. president obama says he brought the prayers of the nation to the pete of newtown, connecticut, a town shattered by friday's shooting and elementary school. 26 people were killed, including 20 children, before the gunman killed himself. speaking at the service, the president noted this was the fourth time he's had to console a community during his time in office. and he demanded changes in the way the u.s. deals with gun violence. >> we will be told that the causes of such violence are complex. and that is true.
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no single law, no set of laws can eliminate evil from the world or prevent every senseless act of violence in our society. but that can't be an excuse for ip action. surely we can do better than this. >> the president says he will meet with a group of law enforcement parents and teachers in an effort to prevent future tragedies. several democratic lawmakers are now calling for a new push on tougher u.s. gun laws, including a ban on military-style assault weapons. we'll take a short break. still to come, why china's new leaders see a future where economic growth isn't driven so much by exports. we'll have the latest. i always wait until the last minute. can i still ship a gift in time for christmas? yeah, sure you can. great. where's your gift? uh... whew. [ male announcer ] break from the holiday stress. ship fedex express by december 22nd for christmas delivery.
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welcome back to the program. these are your headlines. give-and-take on capitol hill, republicans agree to tax hikes in return for entitlement cuts. and abe calls for pressure on the boj after a landslide victory. and china will refocus on the economy despite the prospects of lower growth.
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china's top leaders wrap up their weekend economic planning meeting with a list of must-dos for next year. beijing kept to its foreign rhetoric and quashed any took place of bazooka-type stimulus much like the boost back in 2009. eunice has more for us live from beijing. it sounds like we shouldn't expect much by the way of stimulus. >> no, not at this point. it just sounded very much like we heard a lot of right slogans, but we came up short on details at this economic work conference. the senior officials, broadly speaking, were pushing policies that we've seen in the past. and that is that they are hoping to continue to push the economy away from exports as well as state investment and towards encouraging domestic demand. so one of the highlights was that they said they would continue to promote urbanization.
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this is a pet project of the incoming prime minister. they also said they wanted to build a better safety net for people so that they could feel comfortable spending more money. so for the most part, again, we begin have any concrete timetables. there was no big push for bold reformes and no real concrete targets. >> all right. eunice, stay there. i want to get your view on the other so he had story, as well. the iphone 5 hit the chinese market now. they sold more than 2 million units over the weekend. china telecom is carrying the phone. it's available in china's apple stores and online. china mobile is expected to strike a deal to carry the phone by late 2013. eunice, they need this to sell, because according to idc, in the third quarter, their share of smartphone market in china slipped to sixth place, which is a massive decline in market shares terms.
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how much is this one going to take them back a little bit? >> well, apple faces a lot of challenges in the china market. like you said, they're slipping in their ranking. and that's because there is a lot of competition, especially from -- well, from samsung and lenovo, names that you know, and also from -- players that are coming up with these low, cheaper wsh i should say, smartphones and that is one big challenge for the company here. another big challenge, as you had said, china mobile, it needs to come up with some deal with china mobile over the next year or so in order to try to get access to that company's 700 million viewers. >> eunice, thanks for that and our apologies for that slight technical freeze there. when you're going all the way around the world, these things can happen. still to come, patience with argentina is weighing thin.
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but will buenos aires actually get the boot? we'll talk about it when we come back. [ male announcer ] this december, remember -- you can stay in and like something... or you can get out there and actually like something. the lexus december to remember sales event is on. this is the pursuit of perfection.
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all right. if you're just joining us, this is where we're starting for the week. a pretty tip yid spot for european equities. >> that's right. official state ta activities show argentina growing just 10% a year. empty reports put that rate closer to 25%. argentina faces eviction from the world economic community if it fails to respond. for more on the implications here, joining us now is tang hun and neal sharing chief economist at capital economics. neal, first to you because we're talking about argentina potentially being ejected from the imf. how likely is that and what does it mean for the country? well, it's possible. whether or not it's likely at this stage is i think a different question. in order for argentina to be ejected from the imf, there's several hurdles to overcome and i suspect that's some way off at this stage. >> what's the probability?
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>> i think it's unlikely. i would suggest at this stage. at the moment, this report will go from the imf director. they will discuss it. there's several issues. one would be suspending argentina's voting rights. the ultimate sanction would be to kick argentina out of the imf. whether or not that happens, it's unclear and it remains some way off, at least. >> and i wonder, hans, about the significance. at the same time that we're hearing about the country fiddling with its inflation statistics, of course, we've known that there's this ongone dispute with argentina and some holdout bondholders from its swap back in 2005 and 2010. we were expecting around this time to hear potentially about whether argentina would have to pay those lailt latest round or not. so just to put this in context
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for us, how significant is it here that we hear from the judge and what do you expect bondholders to get at this point from the country? >> yeah. the latest developments in the litigation against argentina has been the deadline has been pushed back by two months to the second circuit. so right now, it's out of his hands in the southern district. and that, at the same time, was coupled with the u.n. group deciding to tell ghana that they should give the boat that was sieged back to argentina. so there are two significant legal victories, but this latest development with the imf is important psychologically for the country. i think christina has been emboldened by the two latest victories on friday. and to get this i think is a reminder to the population that all is not well with argentina
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and it's not in compliance with its international obligations. >> that is true. and we're showing what portion of sovereign debt we're talking about. it's a small part of the overall pie, but it's an important one, nonetheless. >> a small part of the pie and it's important to remember that despite these victories, all is not well on the argentine economy. as you mentioned earlier, they're a bit dice about the growth and the inflation data. we've komd cooperated our own measure of growth. we think they contracted in the second quarter of this year, probably contracted in the third quarter of this year, too. >> how are you measuring that? >> well, we use independent data on things like instrumental production, independent data and surveys or things like consumer confidence and piece all of that together to make autopsy what we think is happening with gdp. so it looks like actually argentina spent at least part of this year in recession. it's been rescued by the rise in soy prices since this summer.
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and -- but despite these legal victory webs all is not well in argentina. >> and if the fundamental macro session is deteriorating, they can go from having a more balanced account to a deficit. >> this is it. argentina is treading a thin line, walk ago tight rope, if you like. at the moment, the commodity prices are to fall, the balance and pace would change dramatically. argentina wouldn't be able to adopt this position that it's adopted with the imf so far. >> bearing in mind the economy, the possibility of a debt default, who on earth is going to invest -- is anybody
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investing in this country at the moment from overseas? and what on earth are they putting their money in if they are. >> well, the volatility has traded ample opportunities to make or lose money. we actually got involved in some of the provincial debt. and the spreads on those bonds have come in. you see a 20% to 30% move to the upside with the latest so-called victories in argentina. but i think that the comments about the economic performance of the country is spot on. the lack of performance by argentina, the lack of growth, really is a reflection of the fact that there hasn't been any adjustments in the internal economy. and that is a reflection of the mismanagement of the economy by the christina fernandez
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community. this has created further distortions in the economy and helps the country back from the kind of growth that it needs. i think it's a long-term investment and this is dependent this current administration leaving office. i think there's enough talent in the country that people with do quite well over the medium to long-term. but i think short-term entries at this point could be precarious. >> hans, thanks for that. thank you so you both. give a little to get a little? house speaker john boehner may be willing to raise taxes on the wealthiest if president obama gives on entitlements in the return. and shinzo abe has a land
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slight win for the ldp to power.
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welcome back to "worldwide exchange." the nasdaq is the underperformer, consistent with the tone we've seen in recent
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weeks and certainly a lot of focus on apple. poised to drop after the 500 mark this weekend suggesting weakness in demand for their products. the dow is down about 30 points from the open and the s&p 500, as well, taking fair value into account. we have seen pressures on europe after the u.s. trading session which in particular saw names of corporate weakness. you can see the ftse cnbc global 00 now down nearly .1%. you can see the sell-off here happening in the last little bit. as i mentioned within companies like agrego, a powermaker, 17% down on indexes. the xetra dax, which was poised for a strong open has slipped down to the reverse, shedding 3%. but, again, it's up 28% this career. we will watch for any results we may get from italy today.
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otherwise, it looks to be a day where caution for 2013 is warranted. >> and talk about caution, house speaker john boehner may be willing to give some ground. he floated an offer to raise tax rates on americans making more than $1 million a year. boehner reportedly wants the president to agree to major entitlement cuts, including raising the eligibility age for medicare and changing how social security benefits are calculated. a spokesman says a budget deal still remains far off and the white house has reportedly not accepted the offer. for more, we're joined by tim stanley from oxford, university. good to see you again. how are you tracking the discussions? do you think any progress has been made or not? >> i think the fiscal cliff should be called the fiscal cave in. the discussions have moved quite far in order to meet the
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president. they started off with boehner putting a generous offer. the tea party was outraged and saying he was being too soft. this weekend, he's not only talking about tax increases on those earning more than $1 million, but also slowing the inflation rate. so the figure that his sources are putting aside is about 1 trillion in increase. so that's quite a significant move. and the president has indicated he's willing to lower his amount to 1.4. so i feel like there is movement on both sides now. >> if this were november, i would be encouraged about thi these signs. unfortunately, we have a couple of working days left before the end of the year. how do we get there? >> the president is going to have to give in on some aspects. there is still a long way to go.
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nonetheless, i think something has happened over this weekend and we are in a new place where the republicans are willing to talk about -- >> why is that? do you think is it basically a sign of bargaining, they're coming from a position of weakness in terms of the bargaining? they will feel as though the american people broadly speaking hold them accountable if we go over the cliff? >> well, first of all, they almost certainly will. so politically, there's a case of republicans being the ones that have to give in. there is a suspicion that barack obama doesn't mind going over the fiscal cliff. the republicans will then have to make a positive case for tax breaks for the super rich. so they suspect that he has nothing to lose for going over the cliff. >> he'll blame it all on -- >> he will blame it all on them. and the republicans are going to
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make a separate case for tax relief for the wealthy. given that he won the election, they're worried that he is in a much, much stronger position. >> meanwhile, newtown, connecticut, 26 people were killed including 20 children before the gunman killed himself. speaking at an inner faith service, the president noted this was the fourth time he's had to console a community during his time in office. and he demanded changes in the way the u.s. deals with gun violence. >> we will be told that the causes of such violence are complex, is and that is true. no single law, no set of laws can eliminate evil from the world or prevent every senseless act of violence in our society.
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but that can't be an excuse for inaction. surely, we can do better than this. >> the president says he will meet with a group of parents, teachers and students to prevent future strategies. several lawmakers are calling for a new push on tough er toug laws. >> it's not so much a question of policy response. i've aerd that there needs to be a discussion bigger about gun control. there needs to be a discussion about mental health care in the united states which has been cut savagely in the united states by state government. there needs to be a conversation about america's history and culture of violence. when it comes to what will happen take place, there is a huge gulf between what we might desire and what is politically feasible. we have to face the fact that gun ownership is constitutionally affected, that any legislation has to be federal and that means outlawing
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whole classes of guns and saying whole categories of people can't get access to them and that is an enormous lobby behind access. >> that's the real issue is the lobby behind this. >> right. >> but i wonder if there isn't a way to pursue tougher assault weapons bans while having this discussion that you talk about and, in fact, there isn't a link that you talk about which is to the to say you're hearing the gop saying largely there needs to be more spending on mental health. it's inconsistent with the message of austerity. >> it's conservative wanting to side step the gun control issue talking instead on about funding other types of programs. maybe that will tie in together. but the reality is that 1999 columbine happened. very little response. 2007 virginia tech, he said
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almost exactly the same things then as he said last night. the weapons of soldiers should not be in the hands of u.s. citizens. he said all that 2342007. why? because the nra in 2012 outspent pro gun control groups by a ratio of five to one. >> i suspect that's why you're not seeing a stronger response, at least rhetorically right now. certainly the public would seem to suggest it is. >> yes. >> tim, thank you so much for joining us from oxford university. >> santander shares have restarted trade after being suspended this morning.
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banesto up 23% as you might expect. we'll talk about that and more when we come back. i always wait until the last minute. can i still ship a gift in time for christmas? yeah, sure you can. great. where's your gift? uh... whew. [ male announcer ] break from the holiday stress. ship fedex express by december 22nd for christmas delivery.
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welcome back to the program. cnbc is taking a closer look at how japan's new war on inflation is playing out across the country. tune into our website, for more analysis. and if you're wondering what's in store more generally for markets in 2013, head to our website where predictions are up. anchors, reporters, editors and contributors are delivering their boldest calls for the trading year ahead. there's plenty to look through. ross? >> yeah. plenty to look through, but, boy, should we all have just bought germany this year? who cares about the eurozone? >> who had the dax call for 2012? >> who worries about the the eurozone financial crisis. buy the year's biggest economy you wouldn't have done bad. down .2% year-to-date. year-to-date, 28.5%. this market has gone up. quite a stellar performance. a little bit of a dip in sort of the june/july period. but ever since, mario draghi has
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been on a tear after a strong performance in the first three months of the year, as well. up another 1%. 2.5% so far, as well, this month before today's performance. so there you go. and if you get, like, one guest said earlier, david jones from jeffries, full quantitative easing for the year, what might that do for german stocks, as well? >> extraordinary. that run may not be over. give-and-take on capitol hill, republicans agree to give ground on tax hikes in return for entitlement cuts. abe heeps pressure on the boj and japan's next prime minister calls for aggressive monetary easing after a landslide election victory. and china is refocusing its economy. the country's new leadership calls for more focus on ex sports despite the prospect of reducing growth in the short-term. and a reminder of some of
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the other stories we're following today. modest growth next year, even amid slower consuminger spending and weak investments. the latest survey forecasts gdp growth at 271% in 2013 versus 2.1% this year and largely unchanged from the previous poll. a majority of economists suggest the u.s. will avoid going over the fiscal cliff. >> time is running out. now shares in spain's santander and banesto have resumed trading after the country's largest bank announced a deal to absorb its subsidiary. you can see santander shares down about 1% and banesto up about 21% which is interesting because i think the premium that santander was offering was closer to 25%. perhaps it was already priced in. nevertheless, 21.5% to 3.64 a share. santander will close some banesto branches once the
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takeover is complete. and the deal values banesto at 3.73 billion euros and that's about .25%, 24.9% to friday's closing fray. like-for-like sales in november, the swedish fashion giant sales total sales are up 7%. and the results would ease concerns. the big discounts are weighing on the bottom line. the stock, as a result, up today, up 2.75%, which is a big outperformances in europe. and faps of pressed pork slathered in barbecue sauce, your wait is over. mcdonald's is bringing back the mcrib sandwich. the fast food chain may be looking to grease up its
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december sales. mcdonald's has admitted that despite its fan base, not everyone likes the product and it doesn't sell all that well, surprising. shares just fractionally higher in frankfurt trade, up 0.06%. but it was really rough after the same-store sales showing they're under pressure to use some of these targets to make their target. >> everybody goes, oh, in mcrib. >> are you having a craving? >> does it makes you think about getting something else? >> do they have it at the mcdonald's here? good question. we will find out after the show. we're going to mcdonald's. >> we'll find out whether it's on the menu. still to come, the traditional christmas rally may be on stand by. the clock ticks towards the fiscal cliff deadline. >> will investors keep a close eye on washington this week?
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you bet. we'll preview the trading day when we come back. [ male announcer ] this december, remember -- what starts with adding a friend... ♪ ...could end with adding a close friend. the lexus december to remember sales event is on. this is the pursuit of perfection.
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japan's prime minister election shinzo abe is putting the heat on the boj just one day after his party's huge win and two days before the bank's next rate setting meeting. in turn, you can see the yen's response in trade this morning, now down -- well, we should say the yen is weakening against the dollar, .75% lower now. that's more than even the first time we checked in earlier this morning. 83.68 is the level and our guests this morning have indicated that the yen perhaps could go to 90 next year. some say even a more disorderly weakening could happen. but at the same time, we're hearing our nomura guest saying he doesn't think so. we're going to stay roughly at
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these levels because it's the u.s. that matter now. >> it's priced in a lot on the japanese side. as far as european equities are concerned, dipping a little bit. the gains last week, the dax up around 1% each last week. they're up 275% so far on the month. today we're down about a third of a percent for the ibex. the ftse down .4%. the xetra dax down .2%. the ftse down just .6%. on the agenda today, let's remine you what's coming on. >> no major economic data, but investors will get reports this week on the current account, personal income and spending, durable goods, consumer sentiment and the final estimate of third quarter gdp. richmond fed president jeffrey lacker was the lone member of the fomc to exchange the rate guidance last week. he sits down for an exclusive interview on cnbc today at 10:30
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eastern. we can take a look at how u.s. futures are doing. a mixed bag this morning. the nasdaq is the underperformer there. on that note, let's get straight out to ben lichtenstein with traders ben, how worried are you about the weakness in apple or is this a company specific story only? >> well, i think it's company specific for the most part. we are seeing slow down a little bit, lack of enthusiasm in terms of energy to the up side. the only convincing move that this market has seen in my opinion over the last few months is this extreme rejection that we saw, off of that 1340/1350 model. but we still have to get back up to around election day totals. we tested it last week. we've sold off from those levels. but for the most part, this market is really lethargic, very little energy, very little participation, as well, from the
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institutional players. we're closing out the year and for the most part, a little bit of a grind to the up side sideways action. very little energy in this trade. >> does that have to do with the fiscal cliff? to quote rbc, we're eager to go long on u.s. equities, but we're going to wait until this issue is resolved. >> yeah. well, i think it does have to do with that. i also think that you can see across multiple major markets, it's not only in the stock. it's not only the apple, if you will, or the nasdaq, if you will. we've been seeing multiple interday related issues. and the other major markets, you know, if apple is doing poorly, then the other major markets, the nasdaq -- i'm sorry, trussel, the s&p and the dow might be doing better. they're in positive territory, but the nasdaq is still negative. but, again, across the board, we're seeing this lethargic type trade. and it's really -- there was energy this year and it's just kind of come off from the outer extremes. gold has come off that 1800
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level. in the middle between 1550 and 1800 which is the range. but, again, for the most part, these are closing the year out sideways. >> we know, thanks for that. good to see you. have a good day. >> thank you. >> ben lichtenstein from trad s >> we'll be back together on friday. now it's time for u.s. squawk.
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good morning. some movement on the fiscal cliff negotiations. house speaker boehner offering up new tax revenue in exchange for spending cuts. the ball supposedly now in the white house's court. business economists expect another year of tepid growth for the economy accor


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